On Point Craigs Investment Partners

There are many sayings in the investment world, and one that always comes up at this time of year is “sell in May and go away”. The adage emerged in the Northern Hemisphere and it suggests investors should sell their shares in May, relax and enjoy the summer months before returning to the market in the autumn (or spring, here in New Zealand). It's based on a suggestion the six months from November to April typically offers higher returns than the May to October period. There’s some truth in this, if we look at seasonal patterns over the years, so will selling in May be a good move for investors in 2024?

There's plenty for investors to keep an eye on in the week ahead, with some of the key releases likely to be the flash PMIs for some of the major economies. Markets will also be monitoring the minutes from the most recent Fed and Reserve Bank of Australia meetings, as well as inflation prints in the UK and Japan. Share investors will also be highly attuned to the latest earnings release from NVIDIA (its share prices is up 87% this year, following a gain of 239% in 2023!). Locally, the Reserve Bank of New Zealand will be in the spotlight on Wednesday afternoon, while there are numerous company results due throughout the week.

We’re starting to see an increasing divergence in the outlook for growth, inflation and the likely next move from many of the world’s central banks. Some are on track to cut policy interest rates as expected, such as the European Central Bank (ECB) and the Bank of England (BOE). Others, like the US Federal Reserve and our own Reserve Bank of New Zealand (RBNZ), are grappling with stubbornly high inflation that has delayed any plans for policy easing. What does this mean for the New Zealand economy, and the outlook for interest rates?

The S&P 500 in the US was up 1.9% last week, while the UK and Europe were stronger still, rising 2.7% and 3.2% respectively. In contrast, it was a tough week for the local market. The NZX 50 fell 1.5% in the wake of a string of recent profit warnings and poor trading updates from the likes of Air New Zealand, Spark, Tourism Holdings and The Warehouse. In the US, the latest CPI and retail sales reports will be in focus on Wednesday, while monthly activity indicators are due in China and Federal Reserve Chair Jerome Powell is speaking on Tuesday. Here in New Zealand, the latest RBNZ survey of expectations and a housing market report will be of interest.

Some women are apprehensive about investing, but there’s plenty of evidence they’re better at it than their male counterparts. There have been several studies conducted over the years, and many of these have shown that on average, women often achieve better investment returns than men. Women are more likely to follow tried and tested investing principles, while men often think they know better. Studies also show women trade a lot less, are more willing to stick to a long-term plan and are much more open to seeking advice. In contrast, men tend to overestimate their abilities, while they believe their more frequent trading will make them money (more often than not, all it does is cost them more in fees). Women are less likely to persevere with a losing position too long, and they don't tend to hold such concentrated portfolios. Women don’t have the monopoly on all these attributes, and there are plenty of sensible, level-headed male investors too. However, when considering these statistics it's surprising there aren't more women working in financial services!

It was the second good week in a row for global sharemarkets, with many continuing to rebound from the weakness we saw in April. Markets still see interest rate cuts on the horizon, with some comforting Federal Reserve comments and a softer jobs report adding to hopes last week. This week, the US consumer will be in focus as the University of Michigan consumer survey is due for release. We'll also get the latest Fed Senior Loan Officer Opinion Survey (SLOOS) on credit conditions, while monetary policy decisions are due in Australia and the UK. The US quarterly reporting season is about 80% complete, but some of the highlights this week will include BP, Disney, Ferrari, FMC Corporation and Nintendo. In New Zealand and Australia, earnings releases will be forthcoming from Infratil, Westpac and ANZ Bank.